Sebi bars PACL from raising money from investors

MUMBAI: The Securities & Exchange Board of India (Sebi) has barred Delhi-based PACL, its promoters and directors from raising any money from investors, effectively shutting down one of India's largest collective investment schemes (CIS), with a corpus of nearly Rs 50,0000 crore. The securities market regulator has directed PACL to refund investors their money along with interest within three months.

Sebi on Friday also said it would make a reference to the state government or local police to register a criminal case against PACL, its promoters and directors for offences of frau, cheating and criminal breach of trust . This is the regulator's biggest crackdown on an investment scheme after Saradha scam.

PACL collected money from depositors and invested in agricultural land across the country. Sebi said the total number of PACL investors would be around 5.85 crore, including clients who have been allotted land and those who are yet to be allotted land.

"Total amount mobilised comes to a whooping Rs 49,100 crore. This figure could have been even more if PACL would have provided details of funds mobilised during April 1, 2012 to February 25, 2013. The collection of such huge funds suggests that PACL has many more customers than the stated 1.22 crore,"Sebi said in its order.

The CBI has also cases registered against the PACL Group and its promoters. Sebi said it would also initiate prosecution proceedings under Section 24 of the Sebi Act against the entity, its promoters and directors Tarlochan Singh, Sukhdev Singh, Gurmeet Singh,Subrata Bhattacharya, Nirmal Singh Bhangoo, Tyger Joginder, Anand Gurwant Singh and Uppal Devinder Kumar among others.

The case dates back to the nineties when Sebi first initiated action against the company but it got stuck in legal hurdles. Last year in February, the Supreme Court through an order remanded the matter back to Sebi and directed it to determine whether the business of PACL fell under the category of collective investment scheme. Based on its findings Sebi could initiate action in accordance with law.

PACL mainly deals in sale and purchase of agricultural land and its development. It was represented by senior advocate Abhishek Manu Singhvi before the regulator. PACL has the option of moving SAT against the Sebi order.